Keep the Highest $/2$

The basic WACC equation

The calculation of a weighted average cost of capital $($WACC$)$ involves calculating the weighted average of the required rates of return on debt and

equity, where the weights equal the percentage of each type of financing in the firm's overall capital structure.

is the symbol that represents the cost of raising capital through retained earnings in the weighted average cost of capital $($WACC$)$ equation.

Kevin Co$.$ has $$2\mathrm{.}43$ million of debt, $$3\mathrm{.}88$ million of preferred stock, and $$1\mathrm{.}17$ million of common equity. What would be its weight on debt?

$57\mathrm{.}06\%$

$32\mathrm{.}49\%$

$46\mathrm{.}68\%$

$41\mathrm{.}50\%$